A financial BLOG written by a DIY investor covering Singapore blue chips, dividend stocks, financial education, corporate news, money saving tips, book reviews and my journey to financial freedom. Currently managing a personal portfolio of more than SGD $1,000,000, I aspire to have an average cash flow of minimum $10,000 per month either through realised capital gains or dividends.

Thursday, May 25, 2017

Been awhile since I last wrote.
Some of my colleagues actually came to ask me if I am the blogger behind Singapore
Blue Chips. While I am often in denial (obviously!), the reflection is such
that the values (if any) that I espoused in investment and life are largely
mapped onto my daily work and spending habits. Yes, this blog is a diary I
share and only people who are in the same frequency can understand the heart in
it. :)

7 years have passed since I left
my civil service job. Looking back, it was one of the best decisions in life;
my investment skills and market acumen enhanced exponentially when I moved into
an investment related position. Every day it is my job requirement to read
between the lines of news, balance sheet and credit quality of companies; my
role has remunerated me handsomely as I have accumulated a good amount of
savings and I am proud to state that I have accumulated more than SGD1M net
asset thus far. The returns of 6% P.A has also been realistic; most of my
investments are on a leveraged basis, for instance purchasing a Fraser
Centrepoint 4.15% 2027 bond with upfront of $100k and bank financing of 150k.
The leveraged and cashflow yield works out to be 4% x 250k - interest cost 3k =
7k (yearly cashflow)/100k (outlay) = 7%.

I have some hits and misses in my
investments as well. Some losses in shares (like SCI) and options while gains
in blue chips like DBS, GLP, Wingtai. Most of them are in the money after adjustments
for dividends but I would prefer to keep them as a reminder that shares do not
appreciate in the long term, but only a diversified portfolio does.

I continue to be prudent in my
spending. I still drive an extremely humble vehicle, despite peers around me at
the porsche league, I am comforted by the fact that I can lose my job today and
continue to rely on my investment income for expenses without stress. Yes, I
can go back to a $3000 a month job if I want too! :)

Currently the 2nd biggest expense
stems from housing requirements. I am considering to move back to a 4 Room HDB
flat on a fully paid basis when I reached my MOP. This is to treat housing as a
consumption product rather than a stored value of wealth. I am unlikely to sell
off my house in my retirement years to fund for retirement. However, there are
many people who are relying to cash out on their homes upon retirement 20 years
later to fund their retirement. I have a bad feeling that the property market
we are seeing may hardly rise above annual inflation rate. Hence, after selling
one's home and paying accruals to CPF, there is hardly any cash left. The local economy is doing well at certain
segments. However, unemployment will continue to creep up and wages have to
come down due to fintec disruption in EVERY job.

As for investment, I am in the
view that cashflow and yield continues to be the backdrop of my investment
thesis. Yes, I know CFA people advocate otherwise and dividend is just a
function of share price, you can make your own dividends by selling piece meal
of your shares. Well, that is text book theory. Cashflow makes me more willing
to hold on to the asset and I continue to assess its future cashflow potential
everytime it makes payment to me.

I am also trying to spend more
already. Some luxuries in life makes life more worth looking forward. Simple
economy class travel, good food and self improvement courses make me a better
person. I will continue to spend money on areas that are able to retain its
value, on a monetary basis and personal/spiritual basis.

Ok, what's my biggest expense? It
is a happy problem. Income tax! I hope the problem comes every year!

Singapore Blue Chips

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About Me

I am an ordinary Singaporean guy in my early thirties who is passionate about investing since 2003.
I live in a 4 room HDB flat and like many Singaporeans, dream of becoming a millionaire.
Currently I am an ordinary worker and have just completed my Masters. I aspire to build up a portfolio of 1 million dollars and derive a yearly recurring dividend income of 6% by 35.
The only way to achieve this aim is to work hard and invest prudently.
I invest in a variety of instruments such as unit trusts, stocks, REITS and foreign currencies mainly Australian dollars options.